Notes from Novogradac

Like little children on the eve of their birthday, from tenant to landlord to investor, people around the country are anxiously awaiting the 2019 Department of Housing and Urban Development (HUD) income limits (or maybe it is just the few of us who have chosen to read this blog post). Either way as the calendar turns to a new year, our thoughts turn to HUD income limits.

Since the expiration of the continuing resolution to fund portions of the federal government, including the Treasury Department, on Dec. 21, the Community Development Financial Institutions (CDFI) Fund has suspended its services, including access to the CDFI Fund help desks and the CDFI Fund Awards Management Information System (AMIS). Because non-essential CDFI Fund staff, including New Markets Tax Credit (NMTC) program office staff, have been furloughed the partial U.S.

New data about existing affordable rental housing paints a worsening picture of the affordable housing crisis. Recent research by the University of Pennsylvania shines a light on the potential loss of more than 1 million homes of federally subsidized housing from the affordable housing stock. The major threats to affordable housing are highlighted, including how changes in funding can lead to housing loss. Current events put this particular risk factor in stark relief – the ongoing partial government shutdown is exacerbating and accelerating the problem of preservation, with 1,150 U.S.

On Jan. 3, the first day of the 116th Congress, the House of Representatives passed H.R. 21, the Consolidated Appropriations Act including funding for the Agriculture; Commerce, Justice, and Science; Financial Services and General Government, Interior and Environment; State and Foreign Operations; and Transportation-HUD (THUD) annual spending bills, enabling the federal agencies the bills fund to reopen during the partial government shutdown that began Dec. 21.

The Community Development Financial Institutions (CDFI) Fund recently released a summary report and public data on new markets tax credit (NMTC) investments through fiscal year (FY) 2016. Updated annually, the data once again reflects the flexibility of the NMTC with respect to the types of businesses financed with flexible or non-traditional rates and terms.

With Democrats taking control of the House, of the numerous issues that may find their way to Congress’s 2019 docket, infrastructure is one of the most notable. Infrastructure saw much fanfare in 2017 through mid-2018, especially with the release of the administration’s infrastructure principles in February, but progress stalled because of lack of agreement. And now, the subject is seeing renewed interest as infrastructure is one of the few major issues that could garner bipartisan support in the current political climate.

The New Markets Tax Credit (NMTC) program was authorized as part of the Community Renewal and Tax Relief Act of 2000. Since then, the Community Development Financial Institutions (CDFI) Fund has made 1,105 awards totaling $54 billion in tax credit authority. Out of the pool of successful allocatees, only 12 awards or approximately 1 percent have gone to either an affiliate of a credit union (Self Help Ventures Fund) or the sponsor of a credit union (Hope Enterprise Corporation).

Forty years ago this month–Nov. 6, 1978–President Jimmy Carter signed legislation that created America’s first federal historic tax credit (HTC), a 10 percent investment tax credit for commercial buildings that were at least 20 years old and retained at least 75 percent of their existing walls.